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Tolkien Charity Files Suit Against New Line Cinema for Failure to pay Share of Film Revenues

LOS ANGELES, Feb. 11 /CNW/ -- The trustees of The Tolkien Trust, a
British charity, have filed an action against New Line Cinema for its failure
to pay a contractually required gross profit participation in the three films
based on the world-famous Lord of the Rings trilogy. The trustees of the
estate of JRR Tolkien and HarperCollins Publishers are co-plaintiffs in the
lawsuit. The suit was filed today in Los Angeles Superior Court.
The Lord of the Rings films produced by New Line are among the most
financially successful films ever created by Hollywood and were released in
2001, 2002 and 2003 respectively. The cumulative worldwide gross receipts to
date total nearly $6 billion. Notwithstanding the overwhelming financial
success of the films, and the fact that the plaintiffs have a gross
participation in each of the films, New Line has failed to pay the plaintiffs
any portion of the gross profit participation at all.
The trustees' UK lawyer, Steven Maier, of Manches LLP, said: "The Tolkien
trustees do not file lawsuits lightly, and have tried unsuccessfully to
resolve their claims out of court. But in this case, New Line has left them
no option at all. New Line has not paid the plaintiffs even one penny of its
contractual share of gross receipts despite the billions of dollars of gross
revenue generated by these wildly successful motion pictures. To make matters
worse, to date New Line has even prevented the plaintiffs from auditing the
last two films of the series. The trustees are very aggrieved by New Line's
arrogance."
The complaint seeks, among other things, in excess of $150 million in
compensatory damages, as well as punitive damages, and a declaration from the
Court that the plaintiffs have a right to terminate any further rights New
Line may have to the Tolkien works under the agreements, including The Hobbit,
due to the serious and material nature of the breach of the agreements.
Bonnie Eskenazi, the trustees' US counsel who filed the complaint, said,
"New Line has brought new meaning to the phrase 'creative accounting.' I
cannot imagine how on earth New Line will argue to a jury that these films
could gross literally billions of dollars, and yet the creator's heirs, who
are entitled to a share of gross receipts, don't get a penny."
JRR Tolkien is the world-renowned author of the "Lord of the Rings"
trilogy and "The Hobbit." The Tolkien Trust is a UK registered charity that
has made grants to charitable causes all over the world totaling over $8
million in the last five years alone.
US Contacts: Lonnie Soury
(212) 414-5857
(917) 519-4521
UK Contacts: Matthew Moth
Main +44 (0) 20 7593 4000